The difference is between GAAP profits, which are what the companies report to shareholders, and the taxable profits calculated in their IRS filings, which is f

The difference is between GAAP profits, which are what the companies report to shareholders, and the taxable profits calculated in their IRS filings, which is full of subsidies and incentive programs. Roughly speaking, GAAP (generally accepted accounting principles) is the internationally accepted way of doing accounting. GAAP is a perfectly reasonable way to calculate taxes due, but congress long ago decided that they want to incentivize certain behavior through the tax code. It's probably worth noting that cutting the 'red tape' on the tax code has proven to be politically unpopular. There are a lot of incentives that are being used for things like clean energy, business investment, hiring welfare recipients, parental leave, etc. that won't be easy to ax. The recent tax code changes did strengthen a few deductions and remove a few others, but this sort of behavior is far from new.